The United States must fix its engine of innovation: the patent system

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IIf your car starts to smoke and spit, you will immediately take it to an auto repair shop. The US patent system – the engine of the country’s innovation economy for more than 200 years – is faltering and smoking. Yet his path to the mechanic is blocked by a stupid Supreme Court ruling.

American innovators are no longer promised reliable and effective rights to the fruits of their labor. In 2014, the Supreme Court reinterpreted laws enacted by Congress since 1790 and created a stricter standard for obtaining patents for healthcare and high-tech innovations. This test allows the United States Patent and Trademark Office (USPTO) to reject applications very easily or for judges to invalidate patents already granted by the office.

The Supreme Court’s two-step test requires, first, that a patent not cover an abstract idea or law of nature, such as Einstein’s discovery of E=mc2. Abstractions like this are not patentable technologies — the “useful arts” that the Constitution authorizes Congress to promote with patent laws. In the second step, if an application claims an abstract idea, it may still be valid if it contains an additional “inventive concept” that applies that abstraction in an eligible technology. For example, physicists Enrico Fermi and Leo Szilard applied E=mc2 to invent a nuclear reactor, for which they received a patent in 1955.

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Since 2014, courts have used the Supreme Court’s criteria to conclude that many discoveries or inventions were abstract ideas. By applying them, the courts have invalidated more than 1,000 issued patents. The impact at the USPTO was even greater: prospective patentees abandoned more than 60,000 applications.

This has particularly affected the biotechnology sector. Life-saving drugs and treatments – the results of decades of research and billions of investments – are now routinely denied patent protection. In one study, 47% of abandoned applications in the life sciences were for treatments for diseases such as cancer, Alzheimer’s disease, diabetes and heart failure.

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In a landmark case, a federal court struck down a patent on a groundbreaking prenatal diagnostic test that used a mother’s blood to check for genetic disorders in her baby. This test made the invasive amniocentesis procedure unnecessary, eliminating the procedure’s higher risk of miscarriage and saving newborns from suffering and death due to life-threatening genetic conditions. This innovative medical test was born out of the biotechnology revolution that began in the early 1980s and was backed by the patent system. The biotech company has asked the Supreme Court to overturn its patent and reconsider the 2014 legal test that spawned this – and many other – tragedies for innovators. The court declined to take the case.

Many industrial and mechanical inventions are also regularly denied patent protection. In a notorious case, a court struck down a patent on a new method of making a better automobile axle.

An ongoing bipartisan reform effort in Congress aims to change the law and strike down the Supreme Court’s test for patentable inventions. Senators Chris Coons (D-Del.) and Thom Tillis (RN.C.) released a bill to reform patent laws. In an unprecedented commitment of time and energy on a single patent law issue, they held three days of hearings in June 2019 with 45 witnesses. I was one of them. Representatives of biotech and high-tech companies, former judges, former government officials, and academics overwhelmingly testified to the urgent need for reform.

But the reform effort has stalled. One of the main reasons is the misleading rhetoric of opponents of reform, who prefer a weakened patent system. Big Tech companies are using the smokescreen of a fight against “patent trolls” to protect the status quo, which gives them easy access to new technologies not protected by patents.

Opponents also argue that this reform effort aims to revive human gene patents, which the Supreme Court banned in 2013. That argument has paid off, prompting health care and civic groups like the American Civil Liberties Union to oppose the reform movement in a mistaken belief. it would help the patients. Given its effectiveness as political rhetoric, opponents of reform keep resurrecting this claim; a recent editorial accused proponents of reform of seeking to “revive gene patenting”.

But this accusation is false. During the hearings, Coons said officially, “Our proposal would not change the law to allow a company to patent a gene as it exists in the human body.” Tillis also criticized this “false narrative” that infects discussions and undermines the reform effort. He said “we don’t intend to patent human genes.” In their editorials and articles, opponents of the reform have not cited a single proponent of the reform who claims it will bring back patents on human genes, confirming that this is indeed a false narrative.

The United States was once recognized as having the gold standard patent system in the world. David Kappos, former director of the US Patent and Trademark Office, said the US patent system was “the greatest engine of innovation the world has ever seen”. False claims about reviving gene patents should not be allowed to derail a crucial effort to get this vital engine of innovation back on all cylinders.

Adam Mossoff is a patent law expert and professor of law at George Mason University and senior fellow at the Hudson Institute.


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